Geologic Carbon Sequestration: Balancing Efficiency Concerns and Public Interest in Property Rights Allocations

Commercial scale deployment of geologic carbon sequestration (GCS) requires a settled legal framework to justify extensive up-front capital investments. A key missing piece in the current legal environment is allocation of property rights—specifically ownership of the subsurface pore space for permanent sequestration of captured carbon dioxide. This Article seeks to begin untangling the various claims to pore space ownership based on the operational and geologic characteristics of the GCS activity (e.g., enhanced oil recovery, coal bed methane extraction, inaccessible coal seams, saline aquifer or basalt formation). Sequestration operations in each of these geologic zones implicate unique property rights issues. In some jurisdictions, state legislatures have attempted to simplify disputes (and appease constituents) by allocating pore space to the surface estate. Other legislative efforts, although unsuccessful, have sought to vest these rights in the state. Approaching pore space ownership from an economic theory rather than responding to political influences, however, provides a perspicacious basis to balance competing interests (e.g., surface estate owners, energy companies seeking GCS alternatives to alleviate impacts of prospective carbon taxing) to maximize efficient use of this resource. Accordingly, this Article identifies and analyzes the competing property rights issues embedded within GCS operations from an economic efficiency perspective and proposes a resolution that balances individual property rights with the public good arising from robust GCS development.

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